Railways introduce surge pricing: An unpleasant gift by Modi govt before festive season

The decision has been slammed by the Opposition which finds it anti-passengers.

Written by Nishant Shekhar | New Delhi | Updated: September 8, 2016 2:52 pm
rajdhani, duronto, train fare, shatabdi Surge pricing occurs when a company raises the price of its offering if there is an increase in demand.

Already dealing with the rising price of essential commodities, the latest decision by the Railway Ministry to introduce flexi fare system in Rajdhani, Duranto and Shatabdi trains came as a big shock for the people. As per the government release, the base fares of these trains will increase by 10 per cent with every 10 per cent of berths sold subject to a prescribed ceiling limit. This means with the rising demands of tickets, the price will automatically increase.

While 10 per cent of the seats will be sold in the normal fare in the beginning, it will go on increasing by 10 per cent with every 10 per cent of berths sold with the ceiling limit at maximum 50 per cent depending upon the demand. For 2AC and Chair Car, the maximum hike is 50 per cent while for 3AC, it is 40 per cent. Other supplementary charges like reservation charges, superfast charge, catering charges, service tax as applicable shall remain unchanged.

Surge pricing occurs when a company raises the price of its offering if there is an increase in demand. The system of surge pricing was first introduced by app-based cab service like Ola and Uber in the national capital. It was later banned after protests by the commuters as the fare which on normal day would be around Rs 13 to 15 a km touched as high as Rs 35 a km under surge price. The same is now going to happen with Rajdhani and other two train fares.

After Krishi Kalyan Cess and Swachh Bharat Cess that resulted in the increase of service tax rate to 15 percent and soaring price of pulses, the flexi pricing in Indian railways was the last thing expected from the government. However, the idea looks influenced by the start up model of entrepreneurship, of which Prime Minister Narendra Modi is a fan.

The decision has been slammed by the Opposition which finds it anti-passengers. And with Diwali and Dusserha round the corner, it is certainly not the best gift by the Modi government.